A proposed law removes the sales tax on farm machinery
Lawmakers are looking at removing sales taxes on ag equipment sales to help farmers save some money.
Mississippi State Senator Neil Whaley’s bill SB 2272 passed in the Senate on Feb. 9 by a vote of 50-1.
The legislation proposes axing the 1.5 percent sales tax rate on “retail sales of farm tractors and parts and labor used to maintain and/or repair such tractors, when made to farmers for agricultural purposes,” the bill says.
Farm implements, materials for raising poultry and livestock, agricultural lime, and logging equipment would also be exempt from the tax.
The tax exemption wouldn’t be a blanket exemption.
SB 2272 directs the State Department of Revenue to create an application process for qualified farmers to get a permit for the exemption.
Once a farmer has the permit, he or she shows it at the point of sale, and the 1.5 percent tax would be removed.
Farm equipment is becoming increasingly expensive in Mississippi.
In 2019, a farmer would’ve spent an average of $190,000 on a tractor. By 2025 that figure jumped to $330,000, Mississippi State University’s yearly estimated ag budgets say.
Removing the sales tax from equipment sales is a tangible way to support farmers as they navigate challenging financial times.
“Mississippi farmers have been struggling with multiple years of losses, and this is a straightforward way we can provide immediate relief and cut their operating costs,” Delbert Hosemann, Lt. Gov. of Mississippi, said in a Feb. 9 social media post after the bill passed.
The National Federation of Independent Business also supports the legislation.
Exempting farmers from the sales tax on equipment would put Mississippi in line with other states.
A total of 32 states provide sales tax exemptions for farm equipment sales.
The bill is now before the Mississippi House of Representatives for consideration.